Hardcastle v Santos Limited

[2017] NSWDC 137

District Court

New South Wales

Medium Neutral Citation:	Hardcastle v Santos Limited [2017] NSWDC 137
Hearing dates:	18 and 19 May 2017
Date of orders:	19 May 2017
Decision date:	19 May 2017
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1)   Defendants’ notice of motion filed 21 February 2017 granted. (2) The Second Amended Statement of Claim be struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 on the basis that no reasonable cause of action is disclosed. (3)   Order the plaintiff to pay the defendants’ costs of the proceedings. (4)   Grant liberty to the defendants to make any application in respect of a special costs order within seven days by notice to the plaintiff and my associate.
Catchwords:	PRACTICE AND PROCEDURE – nuisance – misleading and deceptive conduct - application to strike out – summary dismissal – non-compliance with a court order – no reasonable cause of action disclosed
Cases Cited:	Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Gold and Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 28 Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 Watson v Foxman (1995) 49 NSWLR 315
Category:	Procedural and other rulings
Parties:	Philip Julian Hardcastle (plaintiff) Santos Limited (first defendant) Santos NSW Pty Ltd (second defendant)
Representation:	Counsel: Mr T Bagley (defendants)   Solicitors: Santos GLNG (defendants)
File Number(s):	2014/338782
Publication restriction:	None

Judgment

1. Philip Hardcastle, who is self‑represented, owns rural land adjacent to land on which is located, close to the common boundary, a small gas‑fuelled power station.  The power station existed prior to the purchase by Mr Hardcastle in about June 2005, although it is unclear whether and to what extent it has physically changed since that time.  Mr Hardcastle sues Santos Limited (“Santos”) and Santos NSW Pty Ltd, a company previously known as Eastern Star Gas Limited ("ESG") that was purchased by Santos in 2011.

2. Mr Hardcastle's complaints can be listed as follows:

1. Misleading statements by a former executive of ESG to Mr Hardcastle in 2005 that:

1. the power station was exempted from noise controls in operating an approved 12‑megawatt power station; and

2. Mr Hardcastle would be kept informed of proposals regarding the power station.

2. Misleading statements by ESG to the Department of Planning:

1. to the same effect as in (1)(a) above in an application by ESG for an upgrade of the power station to 40‑megawatts; and

2. as to the likely location of any dwelling to be constructed by Mr Hardcastle on his land.

3. Unconscionable conduct by ESG in failing to build a noise‑dampening wall, at a cost of approximately $400,000 to $500,000, along Mr Hardcastle's southern boundary to protect him from the noise from the power station.

4. An actionable nuisance arising from noise in excess of 35 decibels onto Mr Hardcastle's "homesite" on his land near the power station "now and into the future".

3. Santos and ESG seek to have Mr Hardcastle's claim struck out or summarily dismissed, on the basis that no reasonable cause of action is disclosed.  They also seek to strike out the claim by reason of the default of Mr Hardcastle in failing or refusing to provide an exhibit to an affidavit he has served.

A.  THE DEFAULT REGARDING THE EXHIBIT

4. It is not in dispute that Mr Hardcastle's affidavit refers to a folder of exhibits, that he has been ordered to provide a copy of the “exhibit” to the defendants and that he has failed to do so. Mr Hardcastle took no point about the reference to the singular “exhibit” in the order. In correspondence, he sought to justify his failure by referring to alleged misconduct by the defendants, including "spoliation of evidence".  The correspondence also indicates Mr Hardcastle's reluctance to give over copies of documents without receiving some in return.

5. As Mr Hardcastle is the moving party in these proceedings, the excuses he provides for his default are not persuasive. Ordinarily, his continued failure to comply with the obligation enshrined in the rules to supply copies of exhibits to an affidavit served by him upon a party who is requesting the exhibits, followed by his disregard of a formal order of the Court, may justify a strike‑out order.  However, it became apparent during the hearing that the so called exhibits to the affidavit did not exist at the time the affidavit was executed and do not now exist. The reference in the affidavit to a folder of exhibits represented Mr Hardcastle’s intention of adding documents to the folder, thereby creating and enlarging the exhibits as time progressed.

6. Thus, although the affidavit referred to categories of documents called exhibits, I am satisfied that the precise content of the collection of documents was never defined and does not now exist.  In the result, I proposed that the best course forward, notwithstanding the previous order, was to treat all references in the affidavit to the exhibits as inadmissible and regard the exhibits as non‑existent.  No party opposed this course, a course which would, subject to the matters to which I will come, involve orders setting aside the order of the Court obliging Mr Hardcastle to serve a “copy of the exhibit”, dismissing that part of the notice of motion and reserving the question of costs.

7. The more substantive part of the notice of motion involved the assertion that no reasonable cause of action was disclosed.  I propose to deal separately with the various causes of action that I have identified earlier. In respect of each of them, the question to be determined is whether those causes of action are manifestly untenable in accordance with General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128–129 and other cases, so that there would be no utility in allowing the case to proceed to trial.

B.  MISLEADING STATEMENTS BY MR CASEY OF ESG TO MR HARDCASTLE

8. Paragraph 10 of the Second Amended Statement of Claim asserts that Mr David Casey, an executive of ESG, stated to Mr Hardcastle in about 2005 that ESG had a "Licence to operate the [12‑megawatt power station] and that as it was an approved operation it was exempt from Council noise control rules".  Mr Hardcastle asserts that this representation was made orally and perhaps in emails. 

9. There is no documentary evidence of the representation before me, nor is it contained in these terms in Mr Hardcastle's affidavit.  The affidavit contains evidence at para 43 of Mr Casey stating, "by phone and I believe emails, words to the effect that ESG had a licence to operate the Power Station…and had no legal obligation to build a noise barrier". The absence of any reference to ESG being "exempt from Council noise control rules" is important because this is the alleged misleading aspect of the representation. ESG had development approval to construct a 12‑megawatt power station on the site, as Mr Hardcastle pleads in para 3 of the Second Amended Statement of Claim, and a 12‑megawatt power station was "exempt from needing a licence to operate", according to para 141 of Mr Hardcastle's affidavit. 

10. Thus, there is no evidence of the alleged misrepresentation. 

11. Although Mr Hardcastle's prospects of satisfactorily proving such an oral statement made 12 years ago might be doubted (see Watson v Foxman (1995) 49 NSWLR 315 at 318-319), I do not think it is a proper basis to strike out the claim. He has asserted a conversation and he may yet provide evidence of it in an affidavit (even if he is supposed to have served all his evidence).

12. Is it a misleading statement?  Again, there is no evidence of this.  Such evidence as there was before me and to which I was referred might suggest the contrary.  A report by the Director‑General of the Department of Planning in December 2008 states, in respect of the increased noise levels of a 40‑megawatt power station:

"In absolute terms, the noise levels generated by the project are relatively low and, even at 40 decibels, would remain well below the maximum allowable amenity criteria for existing rural dwellings under the [New South Wales industrial noise policy EPA 2000]."

13. However, it is not altogether clear that the power station was exempt from noise control measures, as Mr Casey allegedly stated, and so I would not be disposed to dismiss the proceedings on this ground.

14. The three primary matters raised against this cause of action were that any such statement was not made in trade or commerce, that it could not have caused damage to Mr Hardcastle, and, thirdly, that if it did, the damage must have occurred more than six years before proceedings commenced in 2014, and thus the proceedings are statute‑barred.

15. In Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 533, the majority judgment of the High Court stated in plain terms that it was undesirable to decide limitation questions in a misleading conduct case in interlocutory proceedings. That case involved the grant of an indemnity consequent upon the alleged misleading conduct, a matter which may raise different considerations from the present proceedings. But in either case, the difficulty is in determining precisely when the damage occurred.

16. Here, Mr Hardcastle asserted that because of the representation made by Mr Casey he refrained from building a house on the site from 2005. But if that is the damage Mr Hardcastle has suffered, it plainly falls outside the limitation period.

17. When confronted with the problem of limitations, Mr Hardcastle indicated a willingness to abandon damages arising from 2005 from his acts or omissions in 2005 consequent upon the alleged misleading conduct. That would be no answer to the operation of the statute.  But if no damage was suffered in 2005, the limitation provision would have no application.

18. Somewhat inconsistently with his assertion of damage in 2005, in his affidavit at paras 44 and following, Mr Hardcastle identifies things he did with a view towards establishing a residence, apparently after Mr Casey's statements, which are referred to in para 43.  It is at least possible that no damage occurred in 2005, contrary to Mr Hardcastle's assertion. 

19. The other damage alleged by Mr Hardcastle is that the approved upgrade to a 40‑megawatt power station occurred in December 2008, a little under six years before the proceedings were commenced. However, there is before me no basis to connect a statement made by Mr Casey to Mr Hardcastle over the phone in 2005, or even in emails, to the approval by the Director‑General of the 40‑megawatt upgrade in 2008.  There is no suggestion that the Director‑General was aware of the phone conversation or emails. The Director-General’s awareness of, and reliance on, such communications must be unlikely in the extreme. 

20. Accordingly, I regard any claim by Mr Hardcastle based on a misrepresentation in 2005 as either statute‑barred, if it resulted in damage from Mr Hardcastle being wrongly persuaded not to pursue the construction of a home, or alternatively, as not conceivably having any causative role in the approval of the 40‑megawatt power station, the matter Mr Hardcastle asserted was the principal damage to him from the representation. 

21. For these reasons, this cause of action is manifestly untenable.

22. As to whether the statement made to Mr Hardcastle was in trade or commerce, it seems doubtful that a representation between neighbours about an approval, in a context void of any commercial dealings between them, could properly be in trade or commerce (see Gold and Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281 at [108], Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603‑604), but I prefer not to base my decision on that matter.

23. The other statement allegedly relied upon by Mr Hardcastle, which is said to have been made by Mr Casey, or by someone at ESG, is that Mr Hardcastle would be kept informed in relation to the power station.  Quite what is the content of such a representation is unclear.  The cause of action may have had some substance if it meant that Mr Hardcastle was, as a consequence of the statement, unaware of the application to upgrade the power station to a 40‑megawatt power station. In that event, it might have been inappropriate to strike the claim out.

24. But Mr Hardcastle was aware of the application. He had made a submission to the Director‑General. The submission was referred to in the Director‑General's report in some detail. The approval that was granted contained conditions which were motivated, or at least potentially motivated, by Mr Hardcastle’s submission.  In the result, whatever Mr Hardcastle may have not been informed about, it did not preclude him from making a submission to the Director‑General. I am not satisfied that there is any arguable case for damage resulting from any failure of Mr Hardcastle not being kept informed. 

25. A statement that Mr Hardcastle would be kept informed is a representation about a future matter, and so would be misleading if there were no reasonable grounds for making it, but, ordinarily would not otherwise be misleading. The absence of reasonable grounds was not a matter asserted in the Second Amended Statement of Claim.

C.  MISLEADING CONDUCT TO THE DIRECTOR‑GENERAL

26. The next complaint Mr Hardcastle raises is that the Director‑General was misled by statements of ESG in the grant of the approval for the 40‑megawatt upgrade.  There is no evidence of a statement to the Director‑General to the effect of that asserted to have been said by Mr Casey to Mr Hardcastle, nor does there seem to be any basis to conclude that the Director‑General may have been misled by something stated by ESG concerning the existing approval. But these are matters which may turn on facts not currently before me.  More significant is the circumstance that there is authority for the proposition that statements to the Director‑General, or indeed to any government instrumentality, are not statements in trade or commerce, at least when they are unconnected with some commercial dealing (see Gold and Copper Resources Pty Ltd at [109]).

27. Further, there is no basis to allege that any misleading statement operated on the mind of the Director-General to approve the 40-megawatt expansion.  The report of the Director-General (see the quoted passage above) indicates that the low level of noise rather than the exemption from noise controls was the significant factor in the decision.

28. A related complaint concerned what ESG said to the Director-General about the intended position of Mr Hardcastle's home on the block. ESG made a submission to the Director-General stating, in effect, that it might be expected that any residence would be built near to the road and away from the power station, as had occurred with the existing dwellings. 

29. However, Mr Hardcastle in his submission to the Director-General disputed that he intended to do that and indicated that his intended residence was to be near the power station.  In that event, there is no basis to assert that the Director-General was misled about the position of Mr Hardcastle's intended residence: the submission of Mr Hardcastle in respect to his residence is specifically referred to in the report.

30. For these two reasons, namely, the lack of any possible causative effect of the alleged misrepresentations on the decision of the Director-General, and the absence of any representation being in trade or commerce, the action based on misleading conduct towards the Director-General is also manifestly untenable.

D.  THE FAILURE OF ESG TO BUILD A WALL AND THE POTENTIAL NUISANCE

31. The claim of unconscionable conduct in ESG not building a wall to ameliorate the alleged nuisance must be viewed in the light of there being no evidence of any excessive noise‑generation. 

32. Mr Hardcastle gives no evidence of noise, other than one day in 2005.  His affidavit (at [89]) includes the statement that when he visited the farm from time to time his observation was that the power station was "almost always idle".  Indeed, this led him to submit a further element of unconscionability, which plainly has no merit, namely, that it is supposedly unconscionable for a party not to proceed to do that which it had an approval to do; in this case, in ESG failing to take steps to enlarge and utilise the power station to its maximum approved capacity.

33. In my view, there is no basis to assert that it is unconscionable for a party to refrain from building noise‑reduction measures in circumstances where there is no evidence of noise and, indeed, a concession that there is, relevantly, no excessive noise presently, and where there is no condition on approval that imposes a requirement for such measures to be constructed.  The conditions that attach to the approval of the 40‑megawatt power station indicate that if there is excessive noise or even complaints of noise, steps may need to be taken in respect to that noise, but that is not now. 

34. Nuisance which has not occurred, or a failure to mitigate an as‑yet non‑existent nuisance, is neither unconscionable nor an instance of unjust enrichment.  There is no feature of unjust enrichment such as mistake, illegality or duress alleged by Mr Hardcastle that would be needed to enliven the application of this cause of action (see Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [150]).

E. CONCLUSION

35. I am persuaded that Mr Hardcastle's claim is manifestly untenable and it would only be productive of wasted costs and time to him, to the defendants and to the Court, were it allowed to proceed. 

36. It follows that there is no need for me to make orders in respect of Mr Hardcastle’s default in respect of the provision of the exhibit, or to deal with another argument of the defendants concerning the proper parties.

37. As to costs, Mr Hardcastle raised the question of the failure by the defendants to expeditiously put on a notice of motion as a ground for refusal of a costs order. But that is not sufficient to displace the usual order that costs follow the event.

38. Accordingly, the orders of the Court are:

1. Defendants’ notice of motion filed 21 February 2017 granted.

2. The Second Amended Statement of Claim be struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 on the basis that no reasonable cause of action is disclosed.

3. Order the plaintiff to pay the defendants’ costs of the proceedings.

4. Grant liberty to the defendants to make any application in respect of a special costs order within seven days by notice to the plaintiff and my associate.

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Decision last updated: 08 June 2017